Reference checks are a useful way for employers to gather information about applicants that they might not discover through the application and interview process. However, despite the usefulness of reference checking, many employers are legitimately concerned about lawsuits from former employees based on information provided in response to a request for a reference, and liability for the actions of employees where the company failed to conduct a thorough reference check. This creates a catch-22 for employers.
To deal with employers' reluctance to provide information about former employees, a number of states have enacted laws “immunizing” employers against employee claims over such disclosures. The immunity laws generally provide protection from claims for defamation of character.
Maryland is among the states that have enacted a reference immunity law. Under Maryland law, an employer that is acting in good faith is immune from liability for communicating information about job performance or the reason for termination of an employee or former employee, on request from a prospective employer, the employee, or as required by local, state, or federal law or rule (MD Code, Courts & Judicial Proceedings, Sec. 5-423). There is a presumption that such communications are made in good faith, which can only be rebutted by proving with clear and convincing evidence that the employer:
• Acted with actual malice toward the employee or former employee; or
• Intentionally or recklessly disclosed false information about the employee or former employee.
The Maryland Court of Special Appeals has made clear that an employee or former employee has a heavy burden of proof in showing "actual malice." ...